Future of South Africa’s National Lottery Uncertain Amid Licensing Dispute
With less than three months before Ithuba’s lottery licence expires, uncertainty surrounds the future of South Africa’s national lottery. Contradictory statements about a potential request for proposals (RFP) for a temporary licence have raised concerns over possible disruptions to ticket sales and the broader regulatory process.
Conflicting Reports on a Temporary Licence
Reports emerged suggesting that trade, industry, and competition minister Mpho Franklyn Parks Tau had issued a closed RFP for a one-year temporary licence. News agency GroundUp claimed to have seen the document, allegedly sent to pre-approved bidders. However, both the chair of the National Lotteries Commission (NLC) and its acting chief operating officer denied the existence of such an RFP.
The Lotteries Act grants the minister authority to extend an existing licence for up to 24 months, a measure previously used by former minister Ebrahim Patel, who extended Ithuba’s licence until May 31, 2025. The Act also allows for temporary licences in specific cases, such as the suspension of an existing licence, adding to speculation about the government’s next steps.
Parliamentary Scrutiny and Industry Concerns
During a recent parliamentary committee meeting, Democratic Alliance MP Toby Chance stated he had “reliable information” confirming the issuance of an RFP. However, Tau’s spokesperson denied any such development, and NLC’s chief operating officer, Nontombi Matomela, also claimed to be unaware of an RFP.
NLC Commissioner Jodi Scholtz assured lawmakers that the commission has contingency plans in place. If ticket sales are interrupted, the NLC intends to use its R4.3 billion in reserves to continue issuing grants and cover operational expenses.
The delay in the bidding process has frustrated potential applicants, who are reportedly considering legal action. Under normal circumstances, a successful bidder would require at least six months to prepare for the transition. The short timeframe before the current licence expires raises concerns that only the incumbent operator may be in a position to continue running the lottery.
Ongoing Corruption Investigations at the NLC
Meanwhile, the Democratic Alliance has proposed a department-wide policy to compensate whistleblowers amid a corruption scandal at the NLC. Reports indicate that whistleblowers were dismissed after revealing that R2 billion in lottery grants may have been misappropriated by senior NLC officials.
In March 2024, the Special Investigation Unit (SIU) secured an interdict from the Special Tribunal to block the sale of a farm linked to former NLC chief operations officer Phillemon Letwaba and his brother. Letwaba is now challenging the constitutionality of the tribunal’s power to freeze assets. Separately, former board chair Alfred Nevhutanda is contesting President Cyril Ramaphosa’s decision to authorize an SIU probe into the corruption allegations. Both cases are expected to take years to resolve in court.
Recommended